Tax gap remains unchanged at £32bn

Tax gap remains unchanged at £32bn

HMRC has estimated that the tax gap for the 2020 to 2021 tax year is £32bn, or 5.1% – the second lowest recorded percentage and unchanged from the previous year.
The annual Measuring Tax Gaps publication estimates the difference between the total amount of tax expected to be paid and the total amount of tax actually paid during the financial year.
In monetary terms, the tax gap for the 2020 to 2021 tax year is £32bn. At 5.1%, there has been no change in the percentage tax gap compared to the previous year, although the monetary value has fallen by £2bn from £34bn in the 2019 to 2020 tax year.
The total tax due to be paid fell from £672bn in 2019 to 2020 to £635bn in 2020 to 2021 due to the economic impact of the pandemic.
HMRC said: “The estimate for the 2020 to 2021 tax gap is the best assessment based on the evidence available at this time. There is some uncertainty for the tax gap estimates for the first year of the pandemic and estimates could be subject to revisions in future years.
“HMRC is the only tax authority in the world that measures and publishes an annual tax gap in such a comprehensive way – covering a single tax year for all the taxes, levies and duties it administers.”